Title Page

Selected Decisions of the International Monetary Fund and Selected Documents

Eighth Issue

International Monetary Fund

Washington, D.C.

May 10, 1976

Frontmatter Page

Second Printing September 1976, with corrections

Third Printing August 1977

Fourth Printing October 1978

Fifth Printing July 1979

Preface

This volume is the Eighth Issue of Selected Decisions of the International Monetary Fund and Selected Documents. It contains the decisions, interpretations, and resolutions of the Executive Directors and the Board of Governors of the International Monetary Fund to which frequent reference is made in the current activities of the Fund. In addition, the volume contains certain documents relating to the Fund and the United Nations.

This issue contains most of the decisions that were published in earlier issues (September 1962, September 1963, January 1965, April 1970, July 1971, September 1972, and January 1, 1975) but not decisions that have ceased to be effective or that are referred to less frequently than in the past. With few exceptions, the decisions in this volume are general in application and relate to obligations, policies, or procedures under the Articles of Agreement. Subject to these few exceptions, decisions that affect individual members are not included. Decisions of the Fund that are included in the By-Laws and the Rules and Regulations are general in application but are not reproduced in this volume.

The Executive Directors have recommended a second amendment of the Articles of Agreement of the Fund, upon the adoption of which all of the decisions in this volume will have to be reviewed from the point of view of consistency with the Articles as amended. A new edition of this collection will be issued as soon as possible after the effective date of the second amendment.

Joseph Gold

General Counsel and Director, Legal Department

Contents

• Preface

• Selected Decisions of the Executive Directors

• Selected Resolutions of the Board of Governors

• Selected Documents

• List of Decisions by Number

• Interpretations Under Article XVIII(a)

• Selected Decisions of the Executive Directors

• ARTICLE III, SECTION 2

  • Adjustment of Quotas (408-2)

• ARTICLE III SECTION 3

  • Subscriptions

    • Gold and Currency Subscribed to the Fund and Accounting by Members for Transactions with the Fund (170-3)

    • Net Official Holdings: Principles of Interpretation (298-3)

• ARTICLE III, SECTION 4

  • Payments When Quotas Are Changed

    • Interpretation (595-3)

• ARTICLE IV, SECTION 2

  • Production Subsidies And Premium Prices for Gold

    • Statement of Policy Concerning Subsidies for Gold Production (233-2)

    • Premium Gold Transactions: Statement to Members (75-(705))

• ARTICLE IV, SECTIONS 3, 4, 5, AND 8

  • Par Values and Margins

    • Foreign Exchange Dealings Based on Parity: Article IV, Section 3 (269-2)

    • Exchange Dealings and Margins Under Conditions of Increasing Convertibility (904-(59/32))

    • Central Rates and Wider Margins: A Temporary Regime (3463-(71/126))

    • Central Rates and Wider Margins: A Temporary Regime—Revised Decision (4083-(73/104))

    • Guidelines for the Management of Floating Exchange Rates (4232-(74/67))

    • Interpretation of Articles of Agreement (71-2)

    • Purchase and Sale of Gold Within the Meaning of Article IV, Section 4(b) (411-1)

    • Changes in Par Values: Fundamental Disequilibrium (278-3)

    • Rates for Computations and Adjustment of the Fund’s Holdings of Currencies (3637-(72/41) G/S, as amended by 5074-(76/73) G/S)

    • Adjustment of Fund’s Holdings of Currencies (4667-(75/82))

• ARTICLE V, SECTIONS 3, 4, AND 5

  • Use of Fund’s Resources and Stand-By Arrangements

    • Interpretation of Articles of Agreement (71-2)

    • Use of Fund’s Resources for Capital Transfers (1238-(61/43))

    • Use of Fund’s Resources: Meaning of Article V, Section 3(a) (i) (284-4)

    • Use of Fund’s Resources: Meaning of “Consistent with the Provisions of This Agreement” in Article V, Section 3 (287-3)

    • Extent of Drawing Rights: Meaning of Article V, Section 3(a) (iii) (451-(55/52))

    • Use of Fund’s Resources and Repurchases (102-(52/11))

    • Increase in Credit Tranches Under the Fund’s Tranche Policies (4934-(76/5))

    • Stand-By Credit Arrangements (155-(52/57))

    • I. Use of Fund’s Resources and Repurchases (270-(53/95), as amended by 876-(59/15) and 1151-(61/6))

    • II. Stand-By Credit Arrangements (270-(53/95), as amended by 876-(59/15) and 1151-(61/6))

    • Stand-By Arrangements (876-(59/15))

    • Use of Fund’s Resources and Stand-By Arrangements (2603-(68/132))

    • Stand-By Arrangements: Refund of Charges (1345-(62/23), as amended by 2620-(68/141))

    • Procedure for Purchases Under Stand-By Arrangements (3006-(70/24))

    • Extended Fund Facility (4377-(74/114), 4934-(76/5))

    • Charge for Extended Arrangements (4720-(75/114))

    • Use of Fund’s Resources: Limitation and Ineligibility Under Article V, Section 5 (284-3)

    • Use of Fund’s Resources: Postponement and Limitation Under Article V, Section 5 (286-1)

    • Use of Fund’s Resources: Meaning of “Is Using” in Article V, Section 5 (292-3)

    • Currencies to Be Drawn and to Be Used in Repurchases (1371-(62/36))

    • Compensatory Financing of Export Fluctuations (4912-(75/207))

    • The Problem of Stabilization of Prices of Primary Products (2772-(69/47), as amended by 4913-(75/207))

    • Fourth International Tin Agreement: Buffer Stock Financing Facility (3179-(70/102), 3351-(71/51))

    • Gold Tranche Purchases Under Article V, Section 3(d) (2836-(69/87))

    • Gold Tranche Purchases and Buffer Stock Financing Facility (3386-(71/83))

    • Facility to Assist Members in Payments Difficulties Resulting from Initial Impact of Increased Costs of Imports of Petroleum and Petroleum Products (4241-(74/67), 4393-(74/121), 4529-(74/153))

    • Gold Tranche and Purchases Under the Oil Facility (4337-(74/102))

    • Oil Facility for 1975 (4634-(75/47))

    • Purchases Under the Oil Facility for 1975: Prior Use of Gold Tranche (4638-(75/47))

    • Oil Facility for 1975: Review of Decision (4769-(75/133))

      • Second Review (4874-(75/180))

      • Third Review (4900-(75/198))

      • Fourth Review (4954-(76/16))

      • Final Review (4986-(76/47))

    • Subsidy Account (4773-(75/136))

    • Gold Collateral Transactions (1543-(63/39))

    • Exchange Transactions Prior to the Establishment of Initial Par Value (1687-(64/22))

• ARTICLE V, SECTION 6

  • Sales of Gold to the Fund

    • Sale of Gold to the Fund by Participant Designated Under Article XXV, Section 5 (2916-(69/127))

• ARTICLE V, SECTION 7

  • Repurchase Obligations

    • Effect of Payment of Gold Subscriptions on Repurchase Obligations (124-2)

    • Repurchase Obligations: Article V, Section 7(b) (447-5)

    • Repurchase Obligations: Article V, Section 7(c) (419-1)

    • Repurchase Obligations: Article V, Section 7(c) (iii) and (iv) and Schedule B, Paragraph 1(d) and (e) (3049-(70/44))

    • Voluntary Repurchases (7-(648))

    • Repurchase and Rule G-7 (119-(52/30))

    • Gold Payments Under Article V, Section 7(b) Amounting to Less Than One Bar (4087-(73/105))

• ARTICLE V, SECTION 8

  • Future Changes in Charges on Fund’s Holdings of Members’ Currencies in Excess of Quota (4239-(74/67))

• ARTICLE VI, SECTION 1

  • Use of Fund’s Resources For Capital Transfers (See also page 35)

• ARTICLE VI, SECTION 3

  • Controls On Capital Transfers (541-(56/39))

• ARTICLE VII, SECTION 2

  • Borrowing

    • General Arrangements to Borrow (1289-(62/1))

      • First Renewal (1951-(65/54))

      • Second Renewal (2858-(69/96))

      • Third Renewal (4421-(74/132))

    • General Arrangements to Borrow: Association of Switzerland (1712-(64/29))

      • First Extension of Association of Switzerland (2377-(67/85))

      • Second Extension of Association of Switzerland (3363- (71/60))

      • Third Extension of Association of Switzerland (4858-(75/172))

    • Borrowing in Connection with Oil Facility (4242-(74/67))

    • Borrowing in Connection with Oil Facility for 1975 (4635-(75/47))

    • Amendments of Agreements with Lenders for the Oil Facility

      • a. Borrowing (4916-(75/208))

      • b. Authorization to Make Calls (4741-(75/120), 4917-(75/208))

      • c. Order of Use (4918-(75/208))

      • d. Payment of Interest (4490-(74/140), 4636-(75/47), 4919-(75/208))

• ARTICLE VIII, SECTION 2(b)

  • Unenforceability of Exchange Contracts

    • Unenforceability of Exchange Contracts: Fund’s Interpretation of Article VIII, Section 2(b) (446-4)

• ARTICLE VIII AND ARTICLE XIV

  • Payments Restrictions

    • Payments Restrictions for Security Reasons: Fund Jurisdiction (144-(52/51))

    • Bilateralism and Convertibility (433-(55/42))

    • Retention Quotas: Decision and Letter of Transmittal (201-(53/29))

    • Discrimination for Balance of Payments Reasons (955-(59/45))

    • Article VIII and Article XIV (1034-(60/27))

  • Payments Arrears (3153-(70/95))

  • Payments Policies

    • Consultations on Members’ Policies in Present Circumstances (4134-(74/4))

  • Multiple Currency Practices

    • Statement to Members Transmitting Fund’s Decisions on Multiple Currency Practices (237-2)

    • Multiple Currency Practices (649-(57/33))

    • Multiple Currency Practices and Exchange Rates: Fund Approval (3504-(71/134))

  • Voluntary Declaration on Trade and Other Current Account Measures (4254-(74/75))

• ARTICLE IX, SECTION 7

  • Privilege For Communications

    • Interpretation of Article IX, Section 7 (534-3)

• ARTICLE XII, SECTION 3

  • Executive Directors

    • Interpretation of Article XII, Sections 3 (b) (i) and 3(f) (2-1)

    • Executive Directors: Article XII, Section 3(c) (574-2, as amended by 2620-(68/141))

    • Additional Appointed Directors (597-4)

    • Adjustment of Quota and Voting Power (180-5)

• ARTICLE XII, SECTION 6

  • Establishment of a General Reserve from Net Income (753-(58/17))

• ARTICLE XIV, SECTION 4

  • Restrictions on Payments and Transfers: Withdrawal

    • Meaning of “Exceptional Circumstances” in Article XIV, Section 4 (117-1)

• ARTICLE XV, SECTION 2

  • Interpretation (343-(54/47))

• ARTICLE XVII

  • Amendments of the Articles of Agreement

    • Board of Governors Resolution No. 22-8: Report of Executive Directors and Proposed Amendment to the Articles of Agreement (2493-(68/74))

    • Board of Governors Resolution No. 29-10: Report of Executive Directors and Proposed Second Amendment to the Articles of Agreement (5049-(76/51))

• ARTICLE XIX

  • Monetary Reserves and Official Holdings

    • Net Official Holdings: Principles of Interpretation (298-3)

  • Balances of Article XIV Currencies Deemed Convertible in Accordance with Article XIX (g)

    • Indonesian Rupiah (4291-(74/88))

    • Spanish Peseta (4279-(74/83))

    • Venezuelan Bolívar (4392-(74/120))

• ARTICLE XX, SECTION 4(i)

  • Use of Fund’s Resources: Postponement Under Article XX, Section 4(i) (284-2)

• ARTICLE XXV, SECTION 6(a)

  • Principles and Procedures for Reconstitution (3457-(71/121) G/S, as amended by 3829-(72/144) S and 4330-(74/101) S; 3829-(72/144) S)

• ARTICLE XXV, SECTION 7

  • Use of Special Drawing Rights in Repurchases and Payment of Charges

    • Exclusion of Special Drawing Rights: Financial Year Ending April 30, 1970 (2901-(69/122) G/S)

    • Exclusion of Special Drawing Rights: Financial Years Ending April 30, 1971 and 1972 (3034-(70/38))

    • Exclusion of Special Drawing Rights: Financial Year Ending April 30, 1970 (3032-(70/38) G/S)

    • Exclusion of Special Drawing Rights: Financial Years Ending April 30, 1971 and 1972 (3320-(71/34) G/S)

    • Use of Special Drawing Rights in Repurchases Outside Article V, Section 7(b) (2901-(69/122) G/S, 3188-(70/106) G/S)

  • Transfer of Special Drawing Rights Held in the General Account to Participants Making Purchases from the Fund (3414-(71/98) G/S)

• ARTICLE XXVI, SECTION 5

  • Special Drawing Account: Payment of Interest, Charges, and Assessments (3010-(70/25) G/S)

• SCHEDULE B

  • Calculation of Repurchase Obligations

    • Calculation of Monetary Reserves (486-2)

    • Calculation of Members’ Repurchase Obligations: Schedule B, Paragraph 3 (510-2)

• GENERAL

  • Fund Assistance in Gold Transactions

    • Members’ Gold Transactions (103-(52/12))

    • Fund Assistance in Gold Transactions (316-(54/27))

    • Fund Assistance in Gold Transactions (372-(56/55))

    • Fund Assistance in Gold Transactions (1033-(60/26))

    • Fund Assistance in Gold Transactions (1116-(60/51))

  • Trust Fund (5069-(76/72))

* *

• Selected Resolutions of the Board of Governors

  • A. Review of Reconstitution Pursuant to Article XXV, Section 6(b) of the Articles of Agreement (Resolution No. 28-2)

  • B. Prescription of the Bank for International Settlements as a Holder of Special Drawing Rights (Resolution No. 29-1)

  • C. Composite Resolution on the Work of the Ad Hoc Committee on Reform of the International Monetary System and Related Issues and on a Program of Immediate Action (Resolutions Nos. 29-7, 29-8, 29-9, 29-10)

  • D. Increases in Quotas of Members—Sixth General Review (Resolution No. 31-2)

• Selected Documents

  • A. Agreement Between the United Nations and the International Monetary Fund

  • B. United Nations Convention on the Privileges and Immunities of the Specialized Agencies, Annex V, and List of Members Which Have Accepted the Convention with Respect to the Fund as of May 10, 1976

• Index

List of Decisions by Number

Number	Page
2-1	160
71-2	30,35
117-1	163
124-2	90
170-3	4
180-5	161
233-2	9
237-2	145
269-2	13
278-3	31
284-2	172
284-3	55
284-4	35
286-1	55
287-3	36
292-3	56
298-3	4,167
408-2	3
411-1	31
419-1	91
446-4	131
447-5	90
486-2	180
510-2	181
534-3	158
574-2, as amended by 2620-(68/141)	160
595-3	8
597-4	161
7-(648)	93
75-(705)	10
102-(52/11)	37
103-(52/12)	182
119-(52/30)	94
144-(52/51)	133
155-(52/57)	42
201-(53/29)	135
270-(5 3/95), as amended by 876-(59/15) and 1151-(61/6)	43
316-(54/27)	182
343-(54/47)	164
433-05/42)	134
451-(55/52)	36
541-(56/39)	97
572-(56/55)	183
649-(57/33)	152
753-(58/17)	162
876-(59/15), see also 270-(53/95)	47
904-(59/32)	13
955-(59/45)	138
1033-(60/26)	183
1034-(60/27)	139
1116-(60/51)	184
1151-(61/6), see 270-(53/95)
1238-(61/43)	35
1289-(62/1)	98
1345-(62/23), as amended by 2620-(68/141)	49
1371-(62/36)	56
1543-(63/39)	83
1687-(64/22)	88
1712-(64/29)	114
1951-(65/54)	111
2377-(67/85)	117
2493-(68/74)	165
2603-(68/132)	47
2620-(68/141), see 574-2 and 1345-(62/23)
2772-(69/47), as amended by 4913-(75/207)	66
2836-(69/87)	69
2858-(69/96)	112
2901-(69/122) G/S	175, 177
2916-(69/127)	89
3006- (70/24)	50
3010-(70/25) G/S	179
3032-(70/38) G/S	176
3034- (70/38)	175
3049-(70/44)	91
3153-(70/95)	142
3179-(70/102)	67
3188-(70/106) G/S	177
3320-(71/34) G/S	176
3351-(71/51)	68
3363-(71/60)	119
3386-(71/83)	70
3414-(71/98) G/S	178
3457-(71/121) G/S, as amended by 3829-(72/144) S and 4330-(74/101) S	173
3463-(71/126), see also 4083-(73/104)	14
3504-(71/134)	154
3637-(72/41) G/S, as amended by 5074-(76/73) G/S	32
3829-(72/144) S, see also 3457-(71/121) G/S	174
4083-(73/104)	18
4087-(73/105)	94
4134.(74/4)	144
4232-(74/67)	21
4239- (74/67)	95
4241-(74/67)	70
4242-(74/67)	122
4254-(74/75)	155
4279-(74/83)	171
4291-(74/88)	171
4330-(74/101) S, see 3457-(71/121) G/S
4337-(74/102)	76
4377-(74/114)	50
4392-(74/120)	171
4393-(74/121)	75
4421-(74/132)	112
4490-(74/140)	129
4529-(74/153)	75
4634-(75/47)	76
4635-(75/47)	127
4636- (75/47)	130
4638-(75/47)	78
4667-(75/82)	33
4720-(75/114)	54
4741-(75/120)	128
4769-(75/133)	78
4773-(75/136)	81
4858-(75/172)	120
4874-(75/180)	79
4900-(75/198)	80
4912-(75/207)	62
4913-(75/207), see 2772-(69/47)
4916-(75/208)	128
4917-(75/208)	129
4918-(75/208)	129
4919-(75/208)	130
4934-(76/5)	41,54
4954-(76/16)	80
4986-(76/47)	81
5049-(76/51)	166
5069-(76/72)	185
5074-(76/73) G/S, see 3637-(72/41) G/S

View Table

Number	Page
2-1	160
71-2	30,35
117-1	163
124-2	90
170-3	4
180-5	161
233-2	9
237-2	145
269-2	13
278-3	31
284-2	172
284-3	55
284-4	35
286-1	55
287-3	36
292-3	56
298-3	4,167
408-2	3
411-1	31
419-1	91
446-4	131
447-5	90
486-2	180
510-2	181
534-3	158
574-2, as amended by 2620-(68/141)	160
595-3	8
597-4	161
7-(648)	93
75-(705)	10
102-(52/11)	37
103-(52/12)	182
119-(52/30)	94
144-(52/51)	133
155-(52/57)	42
201-(53/29)	135
270-(5 3/95), as amended by 876-(59/15) and 1151-(61/6)	43
316-(54/27)	182
343-(54/47)	164
433-05/42)	134
451-(55/52)	36
541-(56/39)	97
572-(56/55)	183
649-(57/33)	152
753-(58/17)	162
876-(59/15), see also 270-(53/95)	47
904-(59/32)	13
955-(59/45)	138
1033-(60/26)	183
1034-(60/27)	139
1116-(60/51)	184
1151-(61/6), see 270-(53/95)
1238-(61/43)	35
1289-(62/1)	98
1345-(62/23), as amended by 2620-(68/141)	49
1371-(62/36)	56
1543-(63/39)	83
1687-(64/22)	88
1712-(64/29)	114
1951-(65/54)	111
2377-(67/85)	117
2493-(68/74)	165
2603-(68/132)	47
2620-(68/141), see 574-2 and 1345-(62/23)
2772-(69/47), as amended by 4913-(75/207)	66
2836-(69/87)	69
2858-(69/96)	112
2901-(69/122) G/S	175, 177
2916-(69/127)	89
3006- (70/24)	50
3010-(70/25) G/S	179
3032-(70/38) G/S	176
3034- (70/38)	175
3049-(70/44)	91
3153-(70/95)	142
3179-(70/102)	67
3188-(70/106) G/S	177
3320-(71/34) G/S	176
3351-(71/51)	68
3363-(71/60)	119
3386-(71/83)	70
3414-(71/98) G/S	178
3457-(71/121) G/S, as amended by 3829-(72/144) S and 4330-(74/101) S	173
3463-(71/126), see also 4083-(73/104)	14
3504-(71/134)	154
3637-(72/41) G/S, as amended by 5074-(76/73) G/S	32
3829-(72/144) S, see also 3457-(71/121) G/S	174
4083-(73/104)	18
4087-(73/105)	94
4134.(74/4)	144
4232-(74/67)	21
4239- (74/67)	95
4241-(74/67)	70
4242-(74/67)	122
4254-(74/75)	155
4279-(74/83)	171
4291-(74/88)	171
4330-(74/101) S, see 3457-(71/121) G/S
4337-(74/102)	76
4377-(74/114)	50
4392-(74/120)	171
4393-(74/121)	75
4421-(74/132)	112
4490-(74/140)	129
4529-(74/153)	75
4634-(75/47)	76
4635-(75/47)	127
4636- (75/47)	130
4638-(75/47)	78
4667-(75/82)	33
4720-(75/114)	54
4741-(75/120)	128
4769-(75/133)	78
4773-(75/136)	81
4858-(75/172)	120
4874-(75/180)	79
4900-(75/198)	80
4912-(75/207)	62
4913-(75/207), see 2772-(69/47)
4916-(75/208)	128
4917-(75/208)	129
4918-(75/208)	129
4919-(75/208)	130
4934-(76/5)	41,54
4954-(76/16)	80
4986-(76/47)	81
5049-(76/51)	166
5069-(76/72)	185
5074-(76/73) G/S, see 3637-(72/41) G/S

Interpretations Under Article XVIII(a)

Interpretation of Articles of Agreement (71-2)

Extent of Drawing Rights: Meaning of Article V, Section 3(a) (iii) (431-(55/52))

Unenforceability of Exchange Contracts: Fund’s Interpretation of Article VIII, Section 2(b) (446-4)

Interpretation of Article IX, Section 7 (534-3)

Interpretation of Article XII, Sections 3(b) (i) and 3(f) (2-1)

Interpretation of Article XV, Section 2 (343-(54/47))